Online business should serve customers, not the bottom line

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Though most companies recognize the value of the Internet as a revenue source, fewer see the Web as an extension of their customer service-a mistake that could prove fatal as e-business progresses.

These days, customers are dictating the way in which they communicate with businesses. They're demanding Web-enabled tools such as live chat, Web collaboration, e-mail management and voice over Internet Protocol. And they're shunning online companies that fail to provide "user experiences" that allow them to solve problems in real-time.

Besides cultivating brand loyalty, companies that invest in online customer service stand to benefit from improved efficiencies with self-service options, and a more targeted marketing effort as a result of the knowledge gleaned from customer interactions. But marketers must be careful about which online customer service technologies they adopt-and what they expect in return for their efforts.

Esteban Kolsky, a Gartner Group Inc. senior research analyst, cautions against focusing too much on the potential bottom-line benefits of online customer service strategies. "Customer service never has been and never should be a source of revenue for the company," said Kolsky, an e-service specialist at the market research firm. "You should not plan around what's good for the company, but what's good for the customer."

Kolsky said some companies may be too eager to move all of their customer service onto the Internet. As a result, they're automating some processes that might be better left offline. For instance, providing voice-enabled Web collaboration to every customer could be a waste of resources. A more efficient deployment of the technology might be to limit its use to a few choice customers who represent high-dollar transactions.

"Just because the technology is there doesn't mean that you need to implement it," Kolsky said. "Your customers may not need it or want it."

Substance over flash

The pitfall that many e-businesses fall into is an over-emphasis on the snazzy look of their Web sites at the expense of best practices such as simple navigation, fast download times, quick e-mail responses, convenient access to product and company information, and accurate shipping and tracking systems.

Research conducted by Jupiter Media Metrix shows 28% of online shopping transactions are not completed because of confusing navigation or ordering processes. And a recent survey by interactive chat provider LivePerson Inc. found 48% of active online shoppers would spend more if they received good customer care. Strong customer service can foster a positive user experience, which in turn can lead to return visits and purchases.

"When people talk about their sites, they often mention eyeballs or page views. In fact, they should be discussing conversion and retention rates," said Kelly Rupp, VP-marketing for WebCriteria, which analyzes online customer experiences for such companies as IBM Corp., Delta Air Lines, Verizon Communications Inc. and Chase Manhattan Bank Corp. "It's one thing to get them there; it's another to get them to come back."

Michael Bettua, director of worldwide marketing for customer relationship management vendor Kana Communications Inc., Redwood City, Calif., said Web-enabled tools such as text messaging and voice technologies can "bring real intelligence to the way companies identify customers' needs and interact with them in a way that they would prefer. So when someone gets an e-mail back that doesn't satisfy their needs, they can escalate that into an interactive chat or a phone conversation."

The buzz behind CRM software and services is that they allow marketers to coordinate various customer service strategies and use that information over time.

Online CRM solutions give companies the ability to catalogue each and every transaction with a customer, said Lance Rosenzweig chairman-CEO of PeopleSoft Inc., a Los Angeles-based enterprise-wide integrator. This allows businesses to create histories of customers' likes, dislikes and concerns that can be accessed by every department, from the call center to marketing.

"You know their preferences, their buying habits," Rosenzweig said. "Based on these patterns, you're able to offer integrated customer care that involves all of the touch points, whether it's text chat, e-mail responses or phone calls."

At the very least, customer service shouldn't make constituents feel less personalized, which can happen if a company is especially adamant about doing everything online. "There's always going to be a need for human interaction," Kolsky said. "I really don't think e-service is going to replace traditional customer service."

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